Richard C. Longworth, senior fellow at The Chicago Council on Global Affairs, contributes his knowledge and ideas about issues that affect the Midwest.

Wednesday, July 16, 2014

A Falling Star in Chicago

Few politicians have seen their reputations dive so far and so fast as Richard M. Daley, the former mayor of Chicago and the symbol of what’s great and what’s grim about the city he ruled for 22 years.

Daley is in the news right now because of the 10th anniversary of his greatest achievement, Millennium Park, the splendid lakefront spread that crowned the city’s rebirth from the depths of its Rust Belt squalor.

Millennium Park sparkles, no question about it. It’s a huge tourist draw. It’s given the city a central meeting place, Chicago’s own Tuileries. It’s a dazzling assembly of sculpture, art, fountains, music, gardens, fun, and culture. It also ran way over budget, created debts that the city is still paying, and included allegedly corrupt sweetheart deals that may yet land Daley in court.

In a way, Millennium Park sums up much of Daley’s reign, the longest in the city’s history.

He achieved much. The Loop revived. Tourism soared. Middle-class families and young people moved back into the city in droves. Navy Pier was renovated and became the city’s biggest tourist draw, even bigger than Millennium Park. Flowers bloomed along the city streets. A coalition of businesses and City Hall ran the city, and got things done.

Mostly, Daley understood that his old factory town was evolving into a global city, and sped the process, seeking foreign investment, supporting the city’s universities, even traveling to China and other foreign points to give Chicago a new global reputation to replace the old stereotype of a gang-ridden City of the Big Shoulders.

The Economist magazine anointed Chicago as a “success story.” Daley was hailed as one of the world’s most effective mayors. Around the Midwest, I got used to hearing officials in other clapped-out industrial cities say they couldn’t compete with Chicago “because you’ve got Richie Daley.”

All this is true. So is the downside of the Daley era, much of it broadcast by his critics during the tenure but only now becoming part of the general public assessment of post-Daley Chicago. Much of it isn’t pretty.

Again, Millennium Park is symbolic. Daley had promised it wouldn’t cost taxpayers a cent. By the time it opened, four years later and hugely over budget, the park cost taxpayers $95 million, plus $30 million to run it, plus $58 million for the lease of its parking garages, which were supposed to have helped pay the bill.

That’s just a starter. Chicago faces an annual structural deficit of $1.2 billion, including payments on under-funded pensions, the worst in the nation: Chicago isn’t Detroit but budget-watchers here are talking seriously about the possibility of civic bankruptcy.

Daley’s successor, Rahm Emanuel, faces the worst budget crisis of any major city, except Detroit, and knows he has to both slash services and increase income – possibly through higher property taxes – to begin to balance the books. The crisis, plus Emanuel’s abrasive personality, have eroded his popularity to the point that it will be hard for him to do what needs to be done and still win re-election next year.

The good and the bad – the global stature and the crushing debt – go together. Being a global city is expensive. The city needs to spend big money on infrastructure, transport, schools, especially policing. But because of the Daley debt, the money isn’t there.

Other chickens are roosting. Chicago remains one of America’s most segregated cities, a problem that Daley inherited but failed to solve. As a result, one-third of Chicago, including the businesses that Daley supported, occupy a booming global city, while many African-Americans and Hispanics live in a third world ghetto, stripped of jobs and battered by the resultant violence that is giving the city a new title – America’s murder capital.

In an attempt to draw middle-class families into Chicago, Daley persuaded the state to give him control over the city’s schools. The result has been a true improvement in public schools, including charter schools, in better neighborhoods, and the decline of many schools in black neighborhoods into dropout factories. Chicago, always a divided city, became more so in Daley’s time.

But debt and deficit remain the legacy that Daley’s critics most often cite. Two examples stand out:

In 2007, as part of his misbegotten bid for the 2016 Olympics, Daley bought a decade of labor peace with a lavish 10-year contract with public employee unions. The city didn’t get the Olympics but it must live with this contract for another two years.

Most egregiously, Daley leased the city’s parking meter system to a private firm for 75 years for a total upfront payment of $1.16 billion. The complex contract was rammed through his rubber-stamp city council in two days, guaranteeing that no alderman even read it, much less understood it. The money was gone in three years, used to pay the city’s bills. It’s clear that the city got a stupendously bad deal. Emanuel has tried to break or modify the contract, with very little luck.

A big children’s park, named after Daley’s late wife Maggie, is being built next to Millennium Park. Experts who’ve seen the plans say it looks first-rate, but another expensive project bearing the Daley name is unlikely to help the former mayor’s reputation.

Since he left office two years ago, Daley has largely dropped out of sight. Emanuel almost never refers to him by name. Daley is a fellow at the University of Chicago’s Harris School and is chairman of a Brookings Institution project on global cities, but keeps a low profile in both roles.

As mayor, Daley presided over a culture of casual civic corruption but there is no evidence he enriched himself in office. Now, though, he is making money as a Coca-Cola director, an advisor to JP Morgan Chase and as Of Counsel to the law firm of Katten Muchin Rosenman. It’s escaped nobody’s notice that Katten Muchin negotiated the disastrous parking meter deal.

So far, Daley has stayed out of court himself, even as a witness. At the moment, his lawyers are arguing that unexplained health problems will keep him from testifying in a city lawsuit involving a clout-heavy deal for a restaurant in Millennium Park. The suit alleges that Daley’s administration – specifically the city’s Park District – gave the sweetheart lease on the Park Grill to a firm headed by one Matthew O’Malley. O’Malley was the lover of a Park District official, Laura Foxgrover, who gave birth to O’Malley’s baby while the negotiations were going on.

In a deposition, Daley said he didn’t remember much of this. Lawyers would love to get him on the stand. Daley isn’t charged with anything, but he is fighting to stay off the stand, perhaps all too aware that what’s left of his reputation could be gone by the time his testimony ends.

1 Comment

Daley is the greatest mayor ever. If you lined up the plus' and minus' of other Mayors, Daley would stand above them.

Chicago's finances bear the legacy of a bull market that effected nearly everyone, public and private. Banks, real estate owners, companies, and municipalities still are in partial workout from the Great Recession. You should do an expose' on "do nothing" Mayors, that say politically nice things but never took risk, never got anything done.

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